ALL THAT IS NEEDED TO DISPROVE THIS THEORY IS A SINGLE APPEARANCE FROM ASSANGE IN THE ECUADORIAN EMBASSY!

http://imgur.com/a/9Jmd5

http://archive.is/heCYT

IMAGES RELATED

CURRENTLY NO PROOF HE IS IN THE EMBASSY IN THE UK

SWEDISH PROSECUTOR AND HIS OWN LAWYER WEREN’T ALLOWED TO SEE HIM. COMMUNICATION THROUGH AMBASSADOR.

Posts off 4chan related to this

= =

Assange and the entire Wikileaks staff has been missing since Oct 15. 3 of his attorneys are dead along with the director of Wikileaks who died on Oct 22. The deadman switch seems to have gone off on Oct 21st (during the DDoS) and again a couple of times after (check dates of big DDoS attacks against the site and when it’s down). It seems like 1. Wikileaks is compromised 2. the keys to unlock some of the insurance files have been released and 3. they are trying very hard to stop people from finding them.

Anon has been working on this nonstop since Oct 15. All threads get slid or deleted and the people making progress go silent. As soon as they found relevant messages encoded in the blockchain, the mempool was flooded, incredibly high transaction fees started showing up and a high number of transactions with encoded disinformation were made. If you look at the deleted threads and the information posted on onion links, it looks like anon was able to unlock some of the files on Oct 27 and that more files are being secretly encoded into the blockchain and the new file directory on the Wikileaks site (the last change was last night). If you want to see anon’s work, google ’09-Nov-438498967 06:00′ or look for insurance/DMS threads on onion chans then look at the dates below.

If you are skeptical, download the latest insurance files posted: https://twitter.com/wikileaks/status/796085225394536448

Run ‘scripts file | head -c 18′ and you will see that the files were not salted. All previously published insurance files have been salted.

Oct 20/21: Wikileaks tweets 5 tweets with misspelled words. The incorrect letters spell “HELP HIM”. The Wikileaks twitter has never made a spelling error, let alone 5 in two days.

Oct 21: Massive DDoS attack on US internet. Wikileaks tweets to imply the attack originates from its supporters, asking them to stop, no evidence supports claim.

Oct 21: DDoS attack takes down Twitter.

At this point anon notices that the insurance keys were posted on several sites and deleted. People start trying to post the information but it is immediately deleted. Everyone takes refuge in onion threads that also disappear.

Oct 21: London Airport evacuated due to “chemical attack”, potentially used as cover to fly Assange out of country. (Conjecture but suspicious timing all the same)

Oct 22: Gavin MacFadyen (mentor to Assange and key player in Wikileaks) dies of lung cancer.

4TH PERSON RELATED TO WIKILEAKS NOW DEAD IN AS MANY MONTHS!!! MASSIVE RED FLAG!!!

Oct 23: Wikileaks Tweets poll asking how best to prove Assange is alive (he still hasn’t appeared on video or at the window since).

Oct 24: Wikileaks Tweets video of Assange and Michael Moore recorded in June.

Oct 24: Anon is able to find the deleted keys. They are posted and deleted again.

Oct 25: Someone comes into a thread and gives anon a hint about messages in the blockchain.

Oct 26: 4chan users successfully decode their first message in Wikileak’s blockchain. Threads are instantly flooded by shills saying that it’s not worth looking into. The blockchain is blocked with fees and 43000 unconfirmed transactions appear in the mempool.

Oct 27 (AM): Anon moves into an onion thread, posts code and a tutorial on decoding messages in the blockchain. Several files and messages are found.

Bitcoin 0.13.1 is released and a ‘soft fork’ begins:

https://bitcoin.org/en/release/v0.13.1

The blockchain is attacked: https://www.reddit.com/r/Bitcoin/comments/59qiyg/is_there_some_attack_going_whats_with_large/

Oct 27(PM): Several anon report losing their connection. Talk of v&s and black bagging begins. Someone posts that they discovered a flaw that allows anyone to retrieve the password from the files. Clues are dumped and the onion threads go silent. On Tox chat someone says someone unlocked some of the files, warns that FBI will announce that new evidence was found in someone’s computer and that a giant human trafficking operation would be exposed.

Nov 10: Staff publicly states their concern for Assange’s continue silence after the election. Incorrectly states that insurance files are future leaks and refers to the ones posted on Nov 8. These are the first files to have filenames that reference their content: https://www.reddit.com/r/IAmA/comments/5c8u9l/we_are_the_wikileaks_staff_despite_our_editor/

AssuredlyAThrowAway, SATXTAN, Here4Popcorn, crawlingfasta, GamingForHonor, kybarnet ALL added to 2 of these subreddits.

Oct 20/21: Wikileaks tweets 5 tweets with misspelled words. The incorrect letters spell “HELP HIM”. The Wikileaks twitter has never made a spelling error, let alone 5 in two days.

https://twitter.com/wikileaks/status/789078312043761665

http://archive.is/0Htlx

#imWithHer – im

https://twitter.com/wikileaks/status/789170993252081666

http://archive.is/OGWL5

Navel Intelligence – Naval – EL

https://twitter.com/wikileaks/status/789173501458456576

http://archive.is/oTPi1

wopper – wHopper – H

https://twitter.com/wikileaks/status/789456189851627522

http://archive.is/mDpQe

presumtive – presumptive – P

(Can’t seem to find all these tweets however this is more suspicious activity that lines up with the forming narrative of Wikileaks being under attack)

Oct 21: Massive DDoS attack on US internet. Wikileaks tweets to imply the attack originates from its supporters, asking them to stop, no evidence supports claim.

https://twitter.com/wikileaks/status/789574436219449345

http://archive.is/XqYuP

Oct 21: DDoS attack takes down Twitter.

At this point anon notices that the insurance keys were posted on several sites and deleted. People start trying to post the information but it is immediately deleted. Everyone takes refuge in onion threads that also disappear.

Oct 21: London Airport evacuated due to “chemical attack”, potentially used as cover to fly Assange out of country. (Conjecture but suspicious timing all the same)

http://time.com/4542496/london-city-airport-chemical-incident/

http://archive.is/Lv5KT

https://youtu.be/ViMVLplr8YM

Oct 22: Gavin MacFadyen (mentor to Assange and key player in Wikileaks) dies of lung cancer.

4TH PERSON RELATED TO WIKILEAKS NOW DEAD IN AS MANY MONTHS!!! MASSIVE RED FLAG!!!

https://www.rt.com/usa/363793-gavin-macfadyen-dies-wikileaks/

http://archive.is/JAZ24

https://twitter.com/wikileaks/status/790278989596295170

http://archive.is/bpq74

Oct 23: Wikileaks Tweets poll asking how best to prove Assange is alive (he still hasn’t appeared on video or at the window since).

https://twitter.com/wikileaks/status/790406530738913285

http://archive.is/7EDvG

Oct 24: Wikileaks Tweets video of Assange and Michael Moore recorded in June.

https://twitter.com/wikileaks/status/790394830979465216

http://archive.is/w1Hpu

Wikileaks also have this posted, AGAIN not proving Assange is alive.

https://twitter.com/SHO_TheCircus/status/790672953331425280

http://archive.is/OiA5B

Oct 24: Anon is able to find the deleted keys. They are posted and deleted again.

[SOURCE/CITATION NEEDED]

Oct 25: Someone comes into a thread and gives anon a hint about messages in the blockchain.

[SOURCE/CITATION NEEDED]

Oct 26: 4chan users successfully decode their first message in Wikileak’s blockchain. Threads are instantly flooded by shills saying that it’s not worth looking into. The blockchain is blocked with fees and 43000 unconfirmed transactions appear in the mempool.

[SOURCE/CITATION NEEDED]

Oct 27 (AM): Anon moves into an onion thread, posts code and a tutorial on decoding messages in the blockchain. Several files and messages are found.

Bitcoin 0.13.1 is released and a ‘soft fork’ begins:

https://bitcoin.org/en/release/v0.13.1

The blockchain is attacked: https://www.reddit.com/r/Bitcoin/comments/59qiyg/is_there_some_attack_going_whats_with_large/

Oct 27(PM): Several anon report losing their connection. Talk of v&s and black bagging begins. Someone posts that they discovered a flaw that allows anyone to retrieve the password from the files. Clues are dumped and the onion threads go silent. On Tox chat someone says someone unlocked some of the files, warns that FBI will announce that new evidence was found in someone’s computer and that a giant human trafficking operation would be exposed.

Nov 10: Staff publicly states their concern for Assange’s continue silence after the election. Incorrectly states that insurance files are future leaks and refers to the ones posted on Nov 8. These are the first files to have filenames that reference their content: https://www.reddit.com/r/IAmA/comments/5c8u9l/we_are_the_wikileaks_staff_despite_our_editor/

If you truly care about Assange and the future of Wikileaks you should consider investigating the possibility of the DMS being activated. It might be the only leverage that can be used to bring him back safely.

= = = =

CURRENTLY NO PROOF HE IS IN THE EMBASSY IN THE UK

SWEDISH PROSECUTOR AND HIS OWN LAWYER WEREN’T ALLOWED TO SEE HIM. COMMUNICATION THROUGH AMBASSADOR.

Back in 2014, civil liberties and privacy advocates were up in arms when the government tried to quietly push through the Cybersecurity Information Sharing Act, or CISA, a law which would allow federal agencies – including the NSA – to share cybersecurity, and really any information with private corporations “notwithstanding any other provision of law.” The most vocal complaint involved CISA’s information-sharing channel, which was ostensibly created for responding quickly to hacks and breaches, and which provided a loophole in privacy laws that enabled intelligence and law enforcement surveillance without a warrant.

Ironically, in its earlier version, CISA had drawn the opposition of tech firms including Apple, Twitter, Reddit, as well as the Business Software Alliance, the Computer and Communications Industry Association and many others including countless politicians and, most amusingly, the White House itself.

In April, a coalition of 55 civil liberties groups and security experts signed onto an open letter opposing it. In July, the Department of Homeland Security itself warned that the bill could overwhelm the agency with data of “dubious value” at the same time as it “sweep[s] away privacy protections.” Most notably, the biggest aggregator of online private content, Facebook, vehemently opposed the legislation however a month ago it was “surprisingly” revealed that Zuckerberg had been quietly on the side of the NSA all along as we reported in “Facebook Caught Secretly Lobbying For Privacy-Destroying “Cyber-Security” Bill.”

Following the blitz response, the push to pass CISA was tabled following a White House threat to veto similar legislation. Then, quietly, CISA reemerged after the same White House mysteriously flip-flopped, expressed its support for precisely the same bill in August.

And then the masks fell off, when it became obvious that not only are corporations eager to pass CISA despite their previous outcry, but that they have both the White House and Congress in their pocket.

As Wired reminds us, when the Senate passed the Cybersecurity Information Sharing Act by a vote of 74 to 21 in October, privacy advocates were again “aghast” that the key portions of the law were left intact which they said make it more amenable to surveillance than actual security, claiming that Congress has quietly stripped out “even more of its remaining privacy protections.”

“They took a bad bill, and they made it worse,” says Robyn Greene, policy counsel for the Open Technology Institute.

But while Congress was preparing a second assault on privacy, it needed a Trojan Horse with which to enact the proposed legislation into law without the public having the ability to reject it.

It found just that by attaching it to the Omnibus $1.1 trillion Spending Bill, which passed the House early this morning, passed the Senate moments ago and will be signed into law by the president in the coming hours.

In a late-night session of Congress, House Speaker Paul Ryan announced a new version of the “omnibus” bill, a massive piece of legislation that deals with much of the federal government’s funding. It now includes a version of CISA as well. Lumping CISA in with the omnibus bill further reduces any chance for debate over its surveillance-friendly provisions, or a White House veto. And the latest version actually chips away even further at the remaining personal information protections that privacy advocates had fought for in the version of the bill that passed the Senate.

It gets: it appears that while CISA was on hiatus, US lawmakers – working under the direction of corporations adnt the NSA – were seeking to weaponize the revised legislation, and as Wired says, the latest version of the bill appended to the omnibus legislation seems to exacerbate the problem of personal information protections.

It creates the ability for the president to set up “portals” for agencies like the FBI and the Office of the Director of National Intelligence, so that companies hand information directly to law enforcement and intelligence agencies instead of to the Department of Homeland Security. And it also changes when information shared for cybersecurity reasons can be used for law enforcement investigations. The earlier bill had only allowed that backchannel use of the data for law enforcement in cases of “imminent threats,” while the new bill requires just a “specific threat,” potentially allowing the search of the data for any specific terms regardless of timeliness.

Some, like Senator Ron Wyden, spoke out out against the changes to the bill in a press statement, writing they’d worsened a bill he already opposed as a surveillance bill in the guise of cybersecurity protections.

Senator Richard Burr, who had introduced the earlier version of bill, didn’t immediately respond to a request for comment.

“Americans deserve policies that protect both their security and their liberty,” he wrote. “This bill fails on both counts.”

Why was the CISA included in the omnibus package, which just passed both the House and the Senate? Because any “nay” votes – or an Obama – would also threaten the entire budget of the federal government. In other words, it was a question of either Americans keeping their privacy or halting the funding of the US government, in effect bankrupting the nation.

And best of all, the rushed bill means there will be no debate.

The bottom line as OTI’s Robyn Green said, “They’ve got this bill that’s kicked around for years and had been too controversial to pass, so they’ve seen an opportunity to push it through without debate. And they’re taking that opportunity.”

The punchline: “They’re kind of pulling a Patriot Act.”

And when Obama signs the $1.1 trillion Spending Bill in a few hours, as he will, it will be official: the second Patriot Act will be the law, and with it what little online privacy US citizens may enjoy, will be gone.

In the past we have explained why when it comes to circumventing capital controls, primarily in the context of China, there are few as simple and as efficient alternatives to Bitcoin – contrary to what Bernanke may think, gold is concentrated money (and in India it now pays interest) but when it comes to transferring it across borders, it tends to be rather problematic. And now Europe appears to have figured this out, and as Reuters reports, European Union countries are preparing to crackdown on virtual currencies such as bitcoin, and anonymous payments made online and via pre-paid cards “in a bid to tackle terrorism financing after the Paris attacks, acording to a draft document.”

Just a week after the Paris terrorist attack, showing a dramatic ability for coordinated work by a continent that is known for anything but, today EU interior and justice ministers are gathering in Brussels for a crisis meeting called after the Paris carnage of last weekend. This happens days after the European Commission already announced it would make procurement of weapons across Europe virtually impossible, if only for citizens who wish to obtain protection legally.

According to Reuters, the justice minister will urge the European Commission, the EU executive arm, to propose measures to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards,” draft conclusions of the meeting said.

Conveniently, Reuters reminds us that “Bitcoin is the most common virtual currency and is used as a vehicle for moving money around the world quickly and anonymously via the web without the need for third-party verification. Electronic anonymous payments can be made also with pre-paid debit cards purchased in stores as gift cards.”

But no more: “EU ministers also plan “to curb more effectively the illicit trade in cultural goods,” the draft document said.”

And with all of Europe sliding ever deeper into negative rates, and where a ban on cash bank notes is an all too realistic possibility, the easiest mechanism to evade the ECB’s creeping financial oppression is about to be made illegal.

Finally, there was no word about the true source of terrorism funding: those mysterious “third parties” which keep pumping the Islamic State with hundreds of millions in cash in exchange for its crude oil. Perhaps Europe is so unwilling to dig down into this most important question (which as we said last night nobody is willing to ask) because it either already knows the answer, or realizes that the people implicated just may be some of the wealthiest and most respected Europeans, and the resulting stench could spread all the way to the various unelected politicians and ex-Goldmanite central bankers?

[KC Editors note : Every once in a while even Bloomberg has an article that’s worth reading]

The penthouse meeting room in Le Parker Meridien hotel in midtown Manhattan is humming with chatter on this June afternoon. About a hundred money managers are networking at the end of the day at a Sandler O’Neill & Partners investor conference as the green rectangle of Central Park stretches into the distance 42 floors below. With neckties loosened and icy drinks in hand, the attendees largely ignore the founder of a fintech startup who’s presenting a PowerPoint about his investing smartphone app. But when the next guest takes the floor, the room falls silent.

These Wall Street veterans all know who Blythe Masters is. She’s the wunderkind who made managing director at JPMorgan Chase at age 28, the financial engineer who helped develop the credit-default swap and bring to life a market that peaked at $58 trillion, in notional terms, in 2007. She’s the banker later vilified by pundits, unfairly some say, after those instruments compounded the damage wrought by the subprime mortgage crash in 2008. Now, one year after quitting JPMorgan amid another controversy, Blythe Masters is back. She isn’t pitching a newly minted derivative or trading stratagem to this room. She’s promoting something wilder: It’s called the blockchain, and it’s the digital ledger software code that powers bitcoin.

Masters is the CEO of Digital Asset Holdings, a New York tech startup. She says her firm is designing software that will enable banks, investors, and other market players to use blockchain technology to change the way they trade loans, bonds, and other assets. If she’s right, she’ll be at the center of yet another whirlwind that will change the markets.

“You should be taking this technology as seriously as you should have been taking the development of the Internet in the early 1990s,” Masters, a lithe 46-year-old Englishwoman with auburn hair and the proper diction of the Home Counties, explains to the rapt audience. “It’s analogous to e-mail for money.”

That’s a bold statement, but Masters isn’t the only voice heralding the coming of the blockchain. The Bank of England, in a report earlier this year, calls it the “first attempt at an Internet of finance,” while the Federal Reserve Bank of St. Louis hails it as a “stroke of genius.” In a June white paper, the World Economic Forum says, “The blockchain protocol threatens to disintermediate almost every process in financial services.”

In a matter of months, this word, blockchain, has gone viral on trading floors and in the executive suites of banks and brokerages on both sides of the Atlantic. You can’t attend a finance conference these days without hearing it mentioned on a panel or at a reception or even in the loo. At a recent blockchain confab in London’s hip East End, the host asked if there were any bankers in the room. More than half the audience members, all dressed in suits, raised their hands.

Now, everyone’s trying to figure out whether the blockchain is just so much hype or if Masters’s firm and other startups are really going to change the systems that process trillions of dollars in securities trades. When investors buy and sell syndicated loans or derivatives or move money around the world, they must cope with opaque and clunky back-office processes that rely on negotiated contracts between buyers and sellers, lots of phone calls, lots of lawyers, and even the occasional fax. It still takes almost 20 days, on average, to settle syndicated loan trades.

Masters is betting that the blockchain, the breakthrough that permits people to buy and sell bitcoins without the need for an intermediary, can be used to streamline all manner of financial transactions. A June report backed by Santander InnoVentures, the Spanish bank’s fintech investment fund, estimated the blockchain could save lenders up to $20 billion annually in settlement, regulatory, and cross-border payment costs.

“You have front-end systems trading at warp speed, and nanoseconds of competitive advantage are being extracted, and yet the back end of Wall Street hasn’t been fundamentally overhauled in decades,” Masters says in an interview at her offices in Manhattan’s Flatiron District. “Firms are dealing with greater requirements for reporting, transparency, and dissemination of data. Costs have gone up and revenues have gone down. This technology really gets to the core of all those issues.”

That’s why there’s been a Cambrian explosion of blockchain startups, accelerators, and skunkworks in London, New York, and Silicon Valley. In April, UBS installed a half dozen developers in London’s Level39 accelerator to download blockchain source code from the Internet and delve into how it might revolutionize payments, cybersecurity, and other banking needs. Barclays, Goldman Sachs, the New York Stock Exchange, and Santander are backing cryptocurrency ventures. And no surprise, Marc Andreessen, Jim Breyer, Reid Hoffman, and other denizens of Sand Hill Road are all over this space. Venture capitalists plowed $400 million into dozens of digital currency startups in the first six months of this year, a fourfold jump from all of 2013, according to industry news site CoinDesk.

Some of these ventures are building on the actual bitcoin blockchain. In June, Nasdaq teamed up with Chain, a San Francisco firm, and launched a project to use the blockchain to issue and transfer the equity shares of closely held companies on the exchange’s private marketplace. “The blockchain is going to bring levels of efficiency to the financial markets that we’ve never seen before,” says Nasdaq CEO Bob Greifeld. “In time, it could be as impactful on the back office as electronic trading was on open outcry.”

By contrast, Ripple Labs, another San Francisco company, runs a self-contained network for financial institutions that doesn’t rely on bitcoin at all. Masters plans to offer banks and other financial players both options: Digital Asset is creating an off-the-shelf private blockchain product and developing ways to connect its customers to the existing bitcoin system.

Whatever form it takes, the blockchain has the potential to change the very structure of the financial services industry, says Oliver Bussmann, the chief information officer at UBS. “If you brought up bitcoin with bankers 12 months ago, you’d lose their attention immediately,” Bussmann says. “Now, everyone sees this as a critical topic. I know of more than 100 firms that are trying to make the blockchain more scalable, more secure, to make the one that everybody will use. There’s a race on out there.”

Maybe so, but rewiring the market’s infrastructure is an awfully big task. So is persuading financial players to place their trust in a system embraced by cryptocurrency anarchists and other fringy characters. Even if market pros do grasp the blockchain’s potential, will they buy in?

“Look, the technology is potentially great, but you’re going to have to bring along all the regulators and the banks to change the ecosystem,” says Hank Uberoi, the former co-head of Goldman Sachs’s global technology operations and now the CEO of Earthport, a London-based payments venture. “Change comes very slowly in that world. That’s going to be the hardest part.”

When it comes to adopting innovation, the financial services industry doesn’t exactly have a stellar record. For example, the global interbank payments system, which Uberoi’s Earthport is trying to shake up, is managed by a consortium of more than 10,000 institutions. It’s so antiquated that it still takes days to send transactions from one part of the world to another. Jon Matonis, a founding director of the Bitcoin Foundation, a Washington group that promotes the cryptocurrency, says a private blockchain run by banks could end up as just “another cartel” and function as poorly as the payments consortium.

Masters had a hard time believing Digital Asset’s Sunil Hirani was serious when he first talked to her about bitcoin.

Photographer: Guzman/Bloomberg Markets

Blythe Masters swings open the door of her ninth-floor offices, parks her suitcase, and exhales. Fresh off a flight from London, she’s relieved to be back on solid ground. Masters says her airliner was landing when it suddenly roared back into the sky to avoid a collision on the runway. “That’s the most dangerous moment I’ve ever had on a plane!” says Masters, who’s dressed in a black knit tunic, black tights, and Burberry-plaid flats.

Her new digs at Digital Asset Holdings, with a worn wooden floor and views of air shafts, are a far cry from the Park Avenue executive suite at JPMorgan. The glass walls are covered in scribbled pieces of code and diagrams with a lot of boxes and arrows. A gray terrier named Luna, the office pooch, scampers under the conference room table. A guest notes that Nasdaq has just hired a “blockchain technology evangelist.” “We have a blockchain artist,” Masters replies, pointing out the one decorative object in the place, a painting depicting a network of black and blue lines. “That is our COO’s homegrown work,” she says with delight. “I rather like it.”

Born in Oxford and educated in economics at Cambridge, Masters came of age at JPMorgan. At 18, she joined its London office as an intern during a year off before university. By her mid-20s, Masters was working on the bank’s derivatives team in New York. She helped design a way to remove lending risk from JPMorgan’s balance sheet by getting another party to protect the bank against a default in return for a premium. The contract, which made it possible to bet a bond would fall in value, was dubbed a credit-default swap, and investors fell in love with it. In 1999, Masters, then 30, was named head of the bank’s global credit derivatives unit.

“Blythe has about as much wrapped up in one brain as I’ve ever encountered in finance,” says John “Mac” McQuown, co-founder of KMV, a maker of widely used credit analysis tools. McQuown, 81, has known Masters since the early 1990s. “She is inventive, a risk taker, and beyond a doubt a force to be reckoned with.”

Masters advanced quickly up JPMorgan’s ranks. Following a stint as CFO of its global investment bank from 2004 to 2007, she was appointed chief of a newly formed unit that helped clients manage risk in commodities markets. During the next five years, she built it into a profitable business that oversaw billions of dollars of physical assets. At the same time, Masters served as a board member and then chair of the Securities Industry and Financial Markets Association, known as SIFMA. Along the way, she earned a reputation as that rare figure on the Street, a corporate player with the innovative chops of an entrepreneur.

“You were one of the most powerful women on Wall Street,” CNBC host Bob Pisani noted during an onstage interview with Masters at a fintech conference in June.

“What do you mean I was?” Masters deadpanned.

After the fall of Lehman Brothers in September 2008, some media outlets highlighted her work with credit derivatives and cast her as one of the instigators of the crash. She became such a target of critics that a French graffiti artist spray-painted her likeness onto the wall of a museum called the Abode of Chaos near Lyon.

In a speech that year at SIFMA’s annual conference in New York, she noted that she’d been dubbed “The Woman Who Built Financial Weapons of Mass Destruction.” She responded to the swipes by saying the problem wasn’t the instrument but the way people used it. “Unfortunately, tools that transfer risk can also increase systemic risk if major counterparties fail to manage their risk exposures properly,” she said.

JPMorgan CEO Jamie Dimon backed her all the way through this period, but her fortunes turned in 2013, when the Federal Energy Regulatory Commission investigated whether traders in her commodities division manipulated California’s electricity market. JPMorgan paid a $410 million settlement to end the case without denying or admitting wrongdoing; Masters wasn’t implicated in the matter. Dimon agreed to sell the business to a Swiss trading firm called Mercuria Energy Group in March 2014, and Masters resigned.

For the first time in her career, she had nowhere to be and nothing to do except hang out with her husband and daughter in her Tribeca townhouse, catch up with friends, and pursue her passion for show jumping. Masters has won first-place ribbons riding her two beloved European warmblood horses, Aslan and Vamos.

Then one day that summer, she grabbed breakfast with Sunil Hirani, an entrepreneur who co-founded Creditex Group, one of the first CDS brokerages. Hirani, 48, an effusive man who’s made a fortune at the intersection of technology and derivatives, couldn’t stop talking about bitcoin. He was toying with the idea of creating futures contracts around the ersatz currency. He was also forming a startup, Digital Asset, to explore how to apply the blockchain to the markets. He’d teamed up with Don Wilson, the founder and CEO of DRW Trading Group, a Chicago-based market maker and trading firm.

Masters was surprised. Hirani was a shrewd Street vet. He’d sold Creditex for $513 million to Intercontinental Exchange in 2008. Why was he messing around with a technology associated with cypherpunks and anti-Fed libertarians? Wasn’t the currency’s price cratering amid scandals involving bitcoin-lubricated online drug bazaars and bankrupt bitcoin exchanges? “Can’t we talk about something more serious?” Masters pleaded with her old friend.

Hirani knew that Masters’s knowledge of the inner workings of the markets would make her the ideal person to build the firm he envisaged and to sell this new technology to Wall Street. So he persuaded Masters to do some homework. Over the next few weeks, she delved into bitcoin’s origins and discussed its potential with Hirani and his colleagues as well as her network of regulators and market players.

So what, exactly, is this thing that sounds like something you’d build with Lego pieces? Like many innovations in finance these days, the blockchain is code.

In 2009, a mysterious coder named Satoshi Nakamoto released bitcoin and the math that makes it work on the Internet. He (or she or they—Nakamoto has yet to be identified) created a peer-to-peer network to enable people to buy and sell bitcoins and to automatically secure and perpetuate the system. Every 10 minutes, coders around the world known as miners race to be the first to solve mathematical equations and record transactions made with bitcoins as entries, or blocks, on a digital ledger. In return for their work, which requires brute force computing power to complete, the program rewards miners with bitcoins, which motivates them to process transactions faster.

Here’s the key part: Every new block is connected to every prior one in a digital chain. So the record of every bitcoin transaction lives on the computers of the miners and is updated with each new entry. That’s why the blockchain is also called a distributed or a decentralized ledger. This replication makes the blockchain secure. The only way to tamper with it would be to seize control of most of the computers holding the blockchain in their memories, which miners call the “51 percent attack.” Such an assault has a better chance of materializing in the next Bond flick than in reality, says Matonis, who’s also an editorial board member at CoinDesk.

As Masters dug deeper into bitcoin, she learned that it was just one of many applications that could run on the blockchain. Startups in London, Silicon Valley, and even Mexico City were already developing ways to use it to transfer and record land titles, airline miles, gold, and diamonds. Masters realized that bitcoin wasn’t really about bitcoin—it was all about the blockchain. “I had an aha moment,” Masters says.

She then plumbed why the ledger could transmit assets without an intermediary, which would change everything she knew about the way the markets completed trades. Buyers and sellers, of course, can’t automatically trust one another. In the fixed-income market, for example, we need middlemen to draw up contracts between buyers and sellers that cover interest payments, terms, and collateral, plus clearinghouses to guarantee the exchange of cash for securities.

Through her research, Masters understood how you could input all that information into a digital “smart contract” on a distributed ledger. Conceptually, it’s similar to the way you can embed video in an e-mail. But the difference is that when you send that smart contract along, it doesn’t just contain data, it transfers ownership of the security. The value belongs to whoever possesses it. So a trade could be settled in minutes instead of days or weeks, Hirani says.

Anyone with access to the ledger can read the contract with a click of a mouse. That means regulators, who depend primarily on self-regulatory organizations to police the markets, could easily verify that a securities transaction didn’t violate anti-money-laundering rules or other laws. The blockchain, in essence, automates trust, Hirani says.

The clincher for Masters was how the technology can affect risk. Every hour that a trade hangs suspended between sale and purchase, the chances mount that it won’t be fulfilled, she says. Institutions have to set aside capital to protect themselves from such failures. Since the 2008 crash, regulators in the U.S. and the European Union have directed banks to allocate ever-larger sums to cover their exposures. If the blockchain could shorten the settlement time for, say, syndicated loans, from 20 days to 10 minutes, this risk would be reduced and capital would be freed up.

“I spent my whole career thinking about risk, markets, infrastructure, and regulation,” Masters says. “I had seen the financial crisis unfold, and I had seen the credit derivatives market get operationally ahead of itself, which resulted in systemic risk counterparty exposures. I began to believe that distributed ledgers had the capability to tackle that problem.”

In March, Masters joined Digital Asset as CEO. She, Hirani, and Wilson set to work developing blockchain-based software for three inefficient markets they deemed ripe for an overhaul: syndicated loans, U.S. Treasury repos, and equity shares in private companies. At the same time, Masters recognized that the open structure of the bitcoin process—no one controls who does the mining—would be anathema to an industry in which client confidentiality is sacrosanct. So in July, the company acquired Hyperledger, a San Francisco software firm that’s developing the technological equivalent of gated communities. Its system is designed so that users will be able to process transactions themselves rather than depend on the open bitcoin blockchain.

“With private chains, you can have a completely known universe of transaction processors,” Masters says. “That appeals to financial institutions that are wary of the bitcoin blockchain.”

While this vision of a superefficient financial world is enticing, let’s not forget that Masters and her rivals will have to persuade institutions and regulators to uproot decades of legacy IT systems and practices. And the introduction of the blockchain will make the markets’ infrastructure even more complex than it already is, at least in the short term.

Skeptics question whether one piece of code could in a single stroke make finance faster, more transparent, and more efficient. “People are talking about how the blockchain is going to be some kind of Messianic savior for the database industry,” says Bradley Howard, the head of digital media at Endava, a London-based IT services provider. “It may be fantastic in some cases, but it could also just be the latest fad.”

Yet Masters, who in July joined the board of Santander’s U.S. auto financing unit as nonexecutive chairman, is betting that the mindset at the highest levels of finance is changing. The advent of peer-to-peer lending, mobile banking, and other innovations is forcing Wall Street’s chieftains to rethink their businesses. She says the blockchain may be the biggest fintech play of them all.

“Blythe sees that a new industry is being created,” says Hirani, who’s known Masters for 17 years. “There’s no infrastructure. There’s no companies that have any kind of scale. She’s done the bank thing. She did commodities. She did derivatives. She did loan portfolio management. This allows her to bring all of that experience to bear in creating an ecosystem—and a company around it.”

Twenty-three years ago, Masters opened up fresh territory with credit derivatives. Now, she’s determined to do it again, although this time it’s with a technology that was initially designed to bypass the financial system. Masters, with a very British dose of understatement, puts it this way: “I’ve always been motivated to innovate where the implications are significant.”

I simply cannot stress enough how important Greece is to freedom, liberty and civilization across the globe. Greece is not a one-off, or merely a small nation in big trouble that holds little relevance for the rest of us. Greece is everything.

What is happening to Greece follows the exact same game plan of what will eventually happen to every other supposedly sovereign nation. First there is an explosion of debt. Then a crisis. Then a bailout. Then creditor imposed hardship is forced upon the average population, in conjunction with unlimited bailouts for the bankers and other oligarch criminals. Finally, when a public which mistakenly believes it is living in a democracy exercises its right to national sovereignty, the sad truth is exposed. They are not a people living under a free political system.

It is precisely because Greece has progressed further along than any other Western nation into this neo-feudal hellhole, that it presents an incredible opportunity for resistance, The Greeks, quite literally, must fight for their very lives. Having been pushed into a corner, they will be forced to experiment in myriad ways if they desire to escape the criminal oligarch vortex in one piece.

Bitcoin service provider and exchange Cubits has partnered with Greek bitcoin exchange BTCGreece to install 1,000 bitcoin ATMs and help small and medium sized businesses move money.

“We are creating the ecosystem of bitcoin and blockchain solutions in the Greek market.” BTCGreece founder Thanos Marinos told CoinTelegraph. “That will include the rollout of 1,000 ATMs and solutions for the e-commerce and tourism industry. Partnering with best of breed companies in the bitcoin space will enable us to provide the Greeks with solutions that will ease the difficulties of the capital controls.”

The Greek government still restricts the weekly withdrawal limit for bank accounts and debit cards to US$464.76 per week. To help small and medium sized companies send payments abroad, the two companies plan to develop a cross border payment system, which will allow small businesses to send payments quickly, at low cost. Marinos:

“Btcgreece and Cubits are offering a solution to the small and medium sized businesses to keep their operations, pay their invoices outside of Greece, pay for datacenter and servers, without the limitations imposed by the banks under capital controls.”

Additionally, bitcoin adoption in Greece is growing rapidly, he added. Individuals and business are beginning to recognize the advantages of bitcoin and its decentralized nature.

“Bitcoin adoption is happening and in a very fast pace,” explained Marinos. “Bitcoin in Greece is not just hype but a solution to day to day problems of people and businesses under capital controls. Also a key factor is that the trust for the traditional banking system is long gone and people are open to bitcoin.”

Best of luck to the Greeks. They need and deserve our full and total support. Their fight is our fight.

Back in its 2013 heyday, when bitcoin soared from below $100 to over $1000 in the span of a few months (in no small part thanks to the collapse of the Cyprus banking system) there was only one real Bitcoin exchange: Magic: The Gathering Online Exchange, or Mt. Gox as it was better known, which had become the world’s largest hub for trading the digital currency. And then, as mysteriously as it had appeared, Mt. Gox went dark, and filed for bankruptcy after nearly half a billion dollars worth of bitcoin “disappeared.”

For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, “Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers’ bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February.”

The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.

“There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble.”

In other words, oops sorry, several hundred million in Bitcoin is unaccounted for but blame the “system weakness.” This promptly led to various artistic interpretations on the Mt. Gox logo, such as this one:

Some were confused if Karpeles was going to get away with nothing more than an excuse, even if – as many speculated – he had personally fabricated exchange data entries and embezzled millions of dollars for his own account.

As a reminder, when it filed for bankruptcy in February 2014, Mt. Gox said 750,000 customer bitcoins and another 100,000 belonging to the exchange were stolen due to a software security flaw. The lost funds represented the equivalent of $480 million at the time of the bankruptcy filing. Mt. Gox also said more than $27 million was missing from its Japanese bank accounts. Karpeles, who had blamed hackers for the loss, later said he had recovered 200,000 of the lost bitcoins.

Earlier today we got the answer when nearly 18 months after his infamous apology, Mark Karpeles was arrested in Tokyo. FT reports that Japanese police have arrested Mark Karpelès, the head of the bankrupt Japan-based bitcoin exchange Mt Gox. The arrest charge is that he made an illegal entry to the system in February 2013 and increased the balance of his account by $1 million.

And yet, a year and a half after the exchange insolvency, nobody truly knows what happened:

The alleged crimes involved are hard to pin down, say police sources, because of the absence of a specific laws governing the virtual currency. Police have acknowledged privately that there technical elements of the alleged disappearance of nearly $500m that “are still not properly understood”.

Asked by Mt Gox to look into the matter in March Last year, the Tokyo Metropolitan Police were not able to begin their investigation until three months later. Even then, say people close to the investigation, the two police departments in charge — the cyber crime unit and the white-collar crime unit — did not properly share information.

The year long investigation, say legal experts, has culminated in an arrest that will allow police to hold Mr Karpelès without charge for 23 days. If he continues to deny any wrongdoing during that time, police may alter the charge, and hold him for another 23 days.

While Karpeles may very well be guilty of embezzlement and massive fraud against his clients, could it be the still undetermined “crimes” relating to a virtual currency will become just the excuse to keep unsavory suspects detained and/or under arrest for an indefinite period of time? Because being held for up to 46 days without any charge seems a little Guantanamoish.

As the FT adds, “the case has exposed both the complexities of crime relating to the bitcoin virtual currency, and the profound difficulties encountered by the Japanese police as they have attempted to investigate the Mt Gox.”

Seemingly the complexity was not as big as that encountered by US regulators and police who 7 years after the greatest criminal systemic collapse, and after the statute of limitations has now expired, have yet to arrest anyone for a multi-trillion systemic crime far greater than Karpeles’ $500 million embezzlement.

As for the former Mt. Gox head, today’s arrest will hardly come as a surprise as it was expected for over two weeks: Japanese journalists had been encamped outside his Tokyo home for several days. Footage of him being led from his home to a police car showed Mr Karpelès wearing a T-shirt and a baseball cap.

Mr Karpelès could, if found guilty, face up to five years in prison or a fine of as much as Y500,000 which at today’s exchange rate is just over $4000.

So let’s do the math: steal $500 million which only you know where it is, spend 5 years in prison, and be fined $5000. Sounds like a pretty good deal…

Anyone curious for more, there was an AMA this morning with a person representing to be Ashley Barr, the first Mt. Gox employee which gives more insight into Karpeles various pathologies. It can be found here.

The red flags and marching songs of Syriza during the Greek crisis, plus the expectation that the banks would be nationalised, revived briefly a 20th-century dream: the forced destruction of the market from above. For much of the 20th century this was how the left conceived the first stage of an economy beyond capitalism. The force would be applied by the working class, either at the ballot box or on the barricades. The lever would be the state. The opportunity would come through frequent episodes of economic collapse.

Instead over the past 25 years it has been the left’s project that has collapsed. The market destroyed the plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a “proletariat”, but no longer thinks or behaves as it once did.

If you lived through all this, and disliked capitalism, it was traumatic. But in the process technology has created a new route out, which the remnants of the old left – and all other forces influenced by it – have either to embrace or die. Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.

As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.

Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.

You only find this new economy if you look hard for it. In Greece, when a grassroots NGO mapped the country’s food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity – but that’s the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff. It seems a meagre and unofficial and even dangerous thing from which to craft an entire alternative to a global system, but so did money and credit in the age of Edward III.

New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.

I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: “This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation.”

…

The 2008 crash wiped 13% off global production and 20% off global trade. Global growth became negative – on a scale where anything below +3% is counted as a recession. It produced, in the west, a depression phase longer than in 1929-33, and even now, amid a pallid recovery, has left mainstream economists terrified about the prospect of long-term stagnation. The aftershocks in Europe are tearing the continent apart.

The solutions have been austerity plus monetary excess. But they are not working. In the worst-hit countries, the pension system has been destroyed, the retirement age is being hiked to 70, and education is being privatised so that graduates now face a lifetime of high debt. Services are being dismantled and infrastructure projects put on hold.

Even now many people fail to grasp the true meaning of the word “austerity”. Austerity is not eight years of spending cuts, as in the UK, or even the social catastrophe inflicted on Greece. It means driving the wages, social wages and living standards in the west down for decades until they meet those of the middle class in China and India on the way up.

Meanwhile in the absence of any alternative model, the conditions for another crisis are being assembled. Real wages have fallen or remained stagnant in Japan, the southern Eurozone, the US and UK. The shadow banking system has been reassembled, and is now bigger than it was in 2008. New rules demanding banks hold more reserves have been watered down or delayed. Meanwhile, flushed with free money, the 1% has got richer.

Neoliberalism, then, has morphed into a system programmed to inflict recurrent catastrophic failures. Worse than that, it has broken the 200-year pattern of industrial capitalism wherein an economic crisis spurs new forms of technological innovation that benefit everybody.

That is because neoliberalism was the first economic model in 200 years the upswing of which was premised on the suppression of wages and smashing the social power and resilience of the working class. If we review the take-off periods studied by long-cycle theorists – the 1850s in Europe, the 1900s and 1950s across the globe – it was the strength of organised labour that forced entrepreneurs and corporations to stop trying to revive outdated business models through wage cuts, and to innovate their way to a new form of capitalism.

The result is that, in each upswing, we find a synthesis of automation, higher wages and higher-value consumption. Today there is no pressure from the workforce, and the technology at the centre of this innovation wave does not demand the creation of higher-consumer spending, or the re‑employment of the old workforce in new jobs. Information is a machine for grinding the price of things lower and slashing the work time needed to support life on the planet.

As a result, large parts of the business class have become neo-luddites. Faced with the possibility of creating gene-sequencing labs, they instead start coffee shops, nail bars and contract cleaning firms: the banking system, the planning system and late neoliberal culture reward above all the creator of low-value, long-hours jobs.

Innovation is happening but it has not, so far, triggered the fifth long upswing for capitalism that long-cycle theory would expect. The reasons lie in the specific nature of information technology.

…

We’re surrounded not just by intelligent machines but by a new layer of reality centred on information. Consider an airliner: a computer flies it; it has been designed, stress-tested and “virtually manufactured” millions of times; it is firing back real-time information to its manufacturers. On board are people squinting at screens connected, in some lucky countries, to the internet.

Seen from the ground it is the same white metal bird as in the James Bond era. But it is now both an intelligent machine and a node on a network. It has an information content and is adding “information value” as well as physical value to the world. On a packed business flight, when everyone’s peering at Excel or Powerpoint, the passenger cabin is best understood as an information factory.

Is it utopian to believe we’re on the verge of an evolution beyond capitalism? Illustration by Joe Magee

But what is all this information worth? You won’t find an answer in the accounts: intellectual property is valued in modern accounting standards by guesswork. A study for the SAS Institute in 2013 found that, in order to put a value on data, neither the cost of gathering it, nor the market value or the future income from it could be adequately calculated. Only through a form of accounting that included non-economic benefits, and risks, could companies actually explain to their shareholders what their data was really worth. Something is broken in the logic we use to value the most important thing in the modern world.

The great technological advance of the early 21st century consists not only of new objects and processes, but of old ones made intelligent. The knowledge content of products is becoming more valuable than the physical things that are used to produce them. But it is a value measured as usefulness, not exchange or asset value. In the 1990s economists and technologists began to have the same thought at once: that this new role for information was creating a new, “third” kind of capitalism – as different from industrial capitalism as industrial capitalism was to the merchant and slave capitalism of the 17th and 18th centuries. But they have struggled to describe the dynamics of the new “cognitive” capitalism. And for a reason. Its dynamics are profoundly non-capitalist.

During and right after the second world war, economists viewed information simply as a “public good”. The US government even decreed that no profit should be made out of patents, only from the production process itself. Then we began to understand intellectual property. In 1962, Kenneth Arrow, the guru of mainstream economics, said that in a free market economy the purpose of inventing things is to create intellectual property rights. He noted: “precisely to the extent that it is successful there is an underutilisation of information.”

You can observe the truth of this in every e-business model ever constructed: monopolise and protect data, capture the free social data generated by user interaction, push commercial forces into areas of data production that were non-commercial before, mine the existing data for predictive value – always and everywhere ensuring nobody but the corporation can utilise the results.

If we restate Arrow’s principle in reverse, its revolutionary implications are obvious: if a free market economy plus intellectual property leads to the “underutilisation of information”, then an economy based on the full utilisation of information cannot tolerate the free market or absolute intellectual property rights. The business models of all our modern digital giants are designed to prevent the abundance of information.

Yet information is abundant. Information goods are freely replicable. Once a thing is made, it can be copied/pasted infinitely. A music track or the giant database you use to build an airliner has a production cost; but its cost of reproduction falls towards zero. Therefore, if the normal price mechanism of capitalism prevails over time, its price will fall towards zero, too.

For the past 25 years economics has been wrestling with this problem: all mainstream economics proceeds from a condition of scarcity, yet the most dynamic force in our modern world is abundant and, as hippy genius Stewart Brand once put it, “wants to be free”.

There is, alongside the world of monopolised information and surveillance created by corporations and governments, a different dynamic growing up around information: information as a social good, free at the point of use, incapable of being owned or exploited or priced. I’ve surveyed the attempts by economists and business gurus to build a framework to understand the dynamics of an economy based on abundant, socially-held information. But it was actually imagined by one 19th-century economist in the era of the telegraph and the steam engine. His name? Karl Marx.

…

The scene is Kentish Town, London, February 1858, sometime around 4am. Marx is a wanted man in Germany and is hard at work scribbling thought-experiments and notes-to-self. When they finally get to see what Marx is writing on this night, the left intellectuals of the 1960s will admit that it “challenges every serious interpretation of Marx yet conceived”. It is called “The Fragment on Machines”.

In the “Fragment” Marx imagines an economy in which the main role of machines is to produce, and the main role of people is to supervise them. He was clear that, in such an economy, the main productive force would be information. The productive power of such machines as the automated cotton-spinning machine, the telegraph and the steam locomotive did not depend on the amount of labour it took to produce them but on the state of social knowledge. Organisation and knowledge, in other words, made a bigger contribution to productive power than the work of making and running the machines.

Given what Marxism was to become – a theory of exploitation based on the theft of labour time – this is a revolutionary statement. It suggests that, once knowledge becomes a productive force in its own right, outweighing the actual labour spent creating a machine, the big question becomes not one of “wages versus profits” but who controls what Marx called the “power of knowledge”.

In an economy where machines do most of the work, the nature of the knowledge locked inside the machines must, he writes, be “social”. In a final late-night thought experiment Marx imagined the end point of this trajectory: the creation of an “ideal machine”, which lasts forever and costs nothing. A machine that could be built for nothing would, he said, add no value at all to the production process and rapidly, over several accounting periods, reduce the price, profit and labour costs of everything else it touched.

Once you understand that information is physical, and that software is a machine, and that storage, bandwidth and processing power are collapsing in price at exponential rates, the value of Marx’s thinking becomes clear. We are surrounded by machines that cost nothing and could, if we wanted them to, last forever.

In these musings, not published until the mid-20th century, Marx imagined information coming to be stored and shared in something called a “general intellect” – which was the mind of everybody on Earth connected by social knowledge, in which every upgrade benefits everybody. In short, he had imagined something close to the information economy in which we live. And, he wrote, its existence would “blow capitalism sky high”.

Marx imagined something close to our information economy. He wrote its existence would blow capitalism sky high

…

With the terrain changed, the old path beyond capitalism imagined by the left of the 20th century is lost.

But a different path has opened up. Collaborative production, using network technology to produce goods and services that only work when they are free, or shared, defines the route beyond the market system. It will need the state to create the framework – just as it created the framework for factory labour, sound currencies and free trade in the early 19th century. The postcapitalist sector is likely to coexist with the market sector for decades, but major change is happening.

Networks restore “granularity” to the postcapitalist project. That is, they can be the basis of a non-market system that replicates itself, which does not need to be created afresh every morning on the computer screen of a commissar.

The transition will involve the state, the market and collaborative production beyond the market. But to make it happen, the entire project of the left, from protest groups to the mainstream social democratic and liberal parties, will have to be reconfigured. In fact, once people understand the logic of the postcapitalist transition, such ideas will no longer be the property of the left – but of a much wider movement, for which we will need new labels.

Who can make this happen? In the old left project it was the industrial working class. More than 200 years ago, the radical journalist John Thelwall warned the men who built the English factories that they had created a new and dangerous form of democracy: “Every large workshop and manufactory is a sort of political society, which no act of parliament can silence, and no magistrate disperse.”

Today the whole of society is a factory. We all participate in the creation and recreation of the brands, norms and institutions that surround us. At the same time the communication grids vital for everyday work and profit are buzzing with shared knowledge and discontent. Today it is the network – like the workshop 200 years ago – that they “cannot silence or disperse”.

Manuel Castells: how modern political movements straddle urban space and cyberspace

True, states can shut down Facebook, Twitter, even the entire internet and mobile network in times of crisis, paralysing the economy in the process. And they can store and monitor every kilobyte of information we produce. But they cannot reimpose the hierarchical, propaganda-driven and ignorant society of 50 years ago, except – as in China, North Korea or Iran – by opting out of key parts of modern life. It would be, as sociologist Manuel Castells put it, like trying to de-electrify a country.

By creating millions of networked people, financially exploited but with the whole of human intelligence one thumb-swipe away, info-capitalism has created a new agent of change in history: the educated and connected human being.

…

This will be more than just an economic transition. There are, of course, the parallel and urgent tasks of decarbonising the world and dealing with demographic and fiscal timebombs. But I’m concentrating on the economic transition triggered by information because, up to now, it has been sidelined. Peer-to-peer has become pigeonholed as a niche obsession for visionaries, while the “big boys” of leftwing economics get on with critiquing austerity.

In fact, on the ground in places such as Greece, resistance to austerity and the creation of “networks you can’t default on” – as one activist put it to me – go hand in hand. Above all, postcapitalism as a concept is about new forms of human behaviour that conventional economics would hardly recognise as relevant.

So how do we visualise the transition ahead? The only coherent parallel we have is the replacement of feudalism by capitalism – and thanks to the work of epidemiologists, geneticists and data analysts, we know a lot more about that transition than we did 50 years ago when it was “owned” by social science. The first thing we have to recognise is: different modes of production are structured around different things. Feudalism was an economic system structured by customs and laws about “obligation”. Capitalism was structured by something purely economic: the market. We can predict, from this, that postcapitalism – whose precondition is abundance – will not simply be a modified form of a complex market society. But we can only begin to grasp at a positive vision of what it will be like.

I don’t mean this as a way to avoid the question: the general economic parameters of a postcapitalist society by, for example, the year 2075, can be outlined. But if such a society is structured around human liberation, not economics, unpredictable things will begin to shape it.

For example, the most obvious thing to Shakespeare, writing in 1600, was that the market had called forth new kinds of behaviour and morality. By analogy, the most obvious “economic” thing to the Shakespeare of 2075 will be the total upheaval in gender relationships, or sexuality, or health. Perhaps there will not even be any playwrights: perhaps the very nature of the media we use to tell stories will change – just as it changed in Elizabethan London when the first public theatres were built.

Think of the difference between, say, Horatio in Hamlet and a character such as Daniel Doyce in Dickens’s Little Dorrit. Both carry around with them a characteristic obsession of their age – Horatio is obsessed with humanist philosophy; Doyce is obsessed with patenting his invention. There can be no character like Doyce in Shakespeare; he would, at best, get a bit part as a working-class comic figure. Yet, by the time Dickens described Doyce, most of his readers knew somebody like him. Just as Shakespeare could not have imagined Doyce, so we too cannot imagine the kind of human beings society will produce once economics is no longer central to life. But we can see their prefigurative forms in the lives of young people all over the world breaking down 20th-century barriers around sexuality, work, creativity and the self.

The feudal model of agriculture collided, first, with environmental limits and then with a massive external shock – the Black Death. After that, there was a demographic shock: too few workers for the land, which raised their wages and made the old feudal obligation system impossible to enforce. The labour shortage also forced technological innovation. The new technologies that underpinned the rise of merchant capitalism were the ones that stimulated commerce (printing and accountancy), the creation of tradeable wealth (mining, the compass and fast ships) and productivity (mathematics and the scientific method).

Present throughout the whole process was something that looks incidental to the old system – money and credit – but which was actually destined to become the basis of the new system. In feudalism, many laws and customs were actually shaped around ignoring money; credit was, in high feudalism, seen as sinful. So when money and credit burst through the boundaries to create a market system, it felt like a revolution. Then, what gave the new system its energy was the discovery of a virtually unlimited source of free wealth in the Americas.

A combination of all these factors took a set of people who had been marginalised under feudalism – humanists, scientists, craftsmen, lawyers, radical preachers and bohemian playwrights such as Shakespeare – and put them at the head of a social transformation. At key moments, though tentatively at first, the state switched from hindering the change to promoting it.

Today, the thing that is corroding capitalism, barely rationalised by mainstream economics, is information. Most laws concerning information define the right of corporations to hoard it and the right of states to access it, irrespective of the human rights of citizens. The equivalent of the printing press and the scientific method is information technology and its spillover into all other technologies, from genetics to healthcare to agriculture to the movies, where it is quickly reducing costs.

The modern equivalent of the long stagnation of late feudalism is the stalled take-off of the third industrial revolution, where instead of rapidly automating work out of existence, we are reduced to creating what David Graeber calls “bullshit jobs” on low pay. And many economies are stagnating.

The equivalent of the new source of free wealth? It’s not exactly wealth: it’s the “externalities” – the free stuff and wellbeing generated by networked interaction. It is the rise of non-market production, of unownable information, of peer networks and unmanaged enterprises. The internet, French economist Yann Moulier-Boutang says, is “both the ship and the ocean” when it comes to the modern equivalent of the discovery of the new world. In fact, it is the ship, the compass, the ocean and the gold.

The modern day external shocks are clear: energy depletion, climate change, ageing populations and migration. They are altering the dynamics of capitalism and making it unworkable in the long term. They have not yet had the same impact as the Black Death – but as we saw in New Orleans in 2005, it does not take the bubonic plague to destroy social order and functional infrastructure in a financially complex and impoverished society.

Once you understand the transition in this way, the need is not for a supercomputed Five Year Plan – but a project, the aim of which should be to expand those technologies, business models and behaviours that dissolve market forces, socialise knowledge, eradicate the need for work and push the economy towards abundance. I call it Project Zero – because its aims are a zero-carbon-energy system; the production of machines, products and services with zero marginal costs; and the reduction of necessary work time as close as possible to zero.

Most 20th-century leftists believed that they did not have the luxury of a managed transition: it was an article of faith for them that nothing of the coming system could exist within the old one – though the working class always attempted to create an alternative life within and “despite” capitalism. As a result, once the possibility of a Soviet-style transition disappeared, the modern left became preoccupied simply with opposing things: the privatisation of healthcare, anti-union laws, fracking – the list goes on.

If I am right, the logical focus for supporters of postcapitalism is to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system. We have to learn what’s urgent, and what’s important, and that sometimes they do not coincide.

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The power of imagination will become critical. In an information society, no thought, debate or dream is wasted – whether conceived in a tent camp, prison cell or the table football space of a startup company.

As with virtual manufacturing, in the transition to postcapitalism the work done at the design stage can reduce mistakes in the implementation stage. And the design of the postcapitalist world, as with software, can be modular. Different people can work on it in different places, at different speeds, with relative autonomy from each other. If I could summon one thing into existence for free it would be a global institution that modelled capitalism correctly: an open source model of the whole economy; official, grey and black. Every experiment run through it would enrich it; it would be open source and with as many datapoints as the most complex climate models.

The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy: between old forms of society moulded around capitalism and new forms of society that prefigure what comes next.

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Is it utopian to believe we’re on the verge of an evolution beyond capitalism? We live in a world in which gay men and women can marry, and in which contraception has, within the space of 50 years, made the average working-class woman freer than the craziest libertine of the Bloomsbury era. Why do we, then, find it so hard to imagine economic freedom?

It is the elites, cut off in their dark-limo world, whose project looks forlorn

It is the elites – cut off in their dark-limo world – whose project looks as forlorn as that of the millennial sects of the 19th century. The democracy of riot squads, corrupt politicians, magnate-controlled newspapers and the surveillance state looks as phoney and fragile as East Germany did 30 years ago.

All readings of human history have to allow for the possibility of a negative outcome. It haunts us in the zombie movie, the disaster movie, in the post-apocalytic wasteland of films such as The Road or Elysium. But why should we not form a picture of the ideal life, built out of abundant information, non-hierarchical work and the dissociation of work from wages?

Millions of people are beginning to realise they have been sold a dream at odds with what reality can deliver. Their response is anger – and retreat towards national forms of capitalism that can only tear the world apart. Watching these emerge, from the pro-Grexit left factions in Syriza to the Front National and the isolationism of the American right has been like watching the nightmares we had during the Lehman Brothers crisis come true.

We need more than just a bunch of utopian dreams and small-scale horizontal projects. We need a project based on reason, evidence and testable designs, that cuts with the grain of history and is sustainable by the planet. And we need to get on with it.

Postcapitalism is published by Allen Lane on 30 July. Paul Mason will be asking whether capitalism has had its day at a sold-out Guardian Live event on 22 July. Let us know your thoughts beforehand at theguardian.com/membership.

On the heels of my report that top Citigroup economist Willem Buiter is calling for the abolishment of cash, Joe Salerno writes:

With the passage of House Bill 195 into law, the State of Louisiana has banned the use of cash in all transactions involving secondhand goods. State representative Ricky Hardy, a co-author of the bill, claims that the bill targets criminals who traffic in stolen goods. According to Hardy, “It’s a mechanism to be used so the police department has something to go on and have a lead.” The bill prohibits cash transactions by “secondhand dealers,” defined to include garage sales, flea markets, resellers of specialty items, and even non-profit resellers like Goodwill. Curiously, it specifically exempts pawnbrokers from the ban. But of course, pawn shops–and not rented stalls at local church flea markets–are notorious as places that criminals frequent to convert stolen goods into quick cash. So what gives? Are the authors of the bill and those who voted for it ignoramuses–or are they deliberately obscuring the real purpose of the bill?

The answer is clear once we examine the other provisions of the bill. In fact, the bill goes far beyond banning cash transactions. As lawyer Thad Ackel notes, the bill requires:

. . . secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.

So the aim of the bill is not to aid law enforcement in apprehending criminals, none of whom would be ever stupid enough to turn over such information. The real intent is to feed government’s insatiable hunger for tax revenues by completely stripping law-abiding citizens of financial privacy in secondhand transactions, every detail of which is fed directly into police files.

This troubling development in Louisiana parallels the intensification of the war on cash by the Federal government. Last month it was reported that the U.S. Justice Department ordered bank employees to snitch to the cops on customers who withdrew $5,000 or more. In a speech, assistant attorney general Leslie Caldwell exhorted banks to “alert law enforcement authorities about the problem” so that police can “seize the funds” or at least “initiate an investigation”.

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